UAE’s Zand Stablecoin Strengthens Digital Dirham’s Position in the International Fintech Arena

Zand Bank in the UAE has obtained regulatory clearance to introduce a stablecoin backed by the dirham, representing a notable advancement in the country's efforts to incorporate digital currencies into its financial system. The stablecoin, called Zand AED, is entirely supported by AED reserves on a one-to-one basis, held in separate, regulated accounts and

. With this launch, Zand becomes the UAE's second digital bank to provide a regulated stablecoin, . The project, managed by Zand Trust—a fully owned subsidiary of Zand Bank— while adhering to the regulatory framework set by the UAE Central Bank.

The release of the stablecoin aligns with the UAE's wider ambitions in digital finance. Just a few days earlier, the nation completed its inaugural government transaction using the Digital Dirham, its central bank digital currency (CBDC), through the mBridge platform

. This transaction, conducted between the Ministry of Finance and Dubai's Department of Finance, was completed in less than two minutes, highlighting the speed and efficiency of the UAE's developing digital infrastructure. "a pivotal milestone in the history of government financial transformation," stressing its importance in improving transparency and operational effectiveness.

The introduction of Zand AED is in line with the UAE's commitment to clear regulations for digital assets.

that stablecoins be entirely backed by high-quality liquid assets and be subject to thorough audits. Zand AED's real-time transparency—enabled by independently audited smart contracts and reserve attestations—demonstrates this dedication. as "a breakthrough for the UAE," strengthening the country's reputation as a pioneer in financial innovation. CEO Michael Chan noted that the stablecoin acts as a "bridge between traditional finance and decentralized finance," .

The timing of Zand's launch also brings attention to Tether's postponed AED-backed stablecoin, which was . Despite the UAE's advancements in regulation, has not yet received approval for its product, underscoring the competitive dynamics in the region's stablecoin sector. Meanwhile, the UAE's Digital Dirham CBDC pilot among government agencies— reflects a broader initiative to digitize the national currency.

The government's adoption of the Digital Dirham highlights its significance as a foundational element in the UAE's digital economy. The Central Bank of the UAE's FIT Programme, which underpins this effort, is designed to accelerate digital payments across both public and private sectors.

that the Digital Dirham serves as a "strategic pillar" in building a fully integrated digital economy.

The launches of Zand AED and the Digital Dirham pilot illustrate a dual strategy: utilizing blockchain for efficient cross-border transactions while maintaining strong regulatory controls. With Tether's absence and the rapid expansion of digital asset markets, the UAE's clear regulatory environment may encourage more institutional participation, positioning the country as a leader in next-generation financial infrastructure.